Gas shortage from Oil India to Assam fertiliser units

Vol 9, PW 13 (06 Oct 05) People & Policy

Oil India is under fire from the fertiliser ministry for not supplying the contracted quantities of gas to the Namrup fertiliser plant of Assam-based Brahmaputra Valley Fertilisers & Chemicals.

Namrup needs about 2.17m cm/d to operate its upgraded factory. It has already signed an agreement with Oil India to purchase 1.72m cm/d gas on a firm basis and has a separate agreement for the balance 0.45m cm/d on a fall-back basis from ONGC and GAIL.

But supplies from Oil India to the Namrup fertiliser factories fall way below what Oil India has agreed to supply and varies from 1.37m cm/d to 1.661m cm/d, not the 1.72m cm/d that it committed through contract. Because of this erratic and fluctuating supply of gas, the commissioning of Namrup-II had to be suspended a number of times.

Personal efforts by the chairman and managing director of Brahmaputra Valley Fertilizers & Chemicals to resolve the issue with Oil India time and again, have failed to evince any firm commitment from the other side for maintaining supplies of natural gas at 1.72m cm/d. Worse, it seems Oil India has told Brahmaputra Valley Fertilizers & Chemicals that it might have to further cut gas supplies because the main crude export pipeline was blasted by separatist militants.

Anger at the fertiliser ministry is compounded by a written promise from the oil ministry in May this year that Oil India will honour the contract something that hasnt happened. Brahmaputra Valley Fertilisers argues that it needs a minimum 1.72m cm/d to enable continuity in production activities of Namrup-III plant along with commissioning of Namrup-II.

Adds the fertiliser ministry: Now when the company has reached a stage of commissioning of the plant, inadequate and irregular supply of gas by Oil India has withheld the process.